This is an archived release.
Households reduced their borrowing and net acquisition of securities during the last four quarter period. Net borrowing is modest and the development has settled from the second quarter of 2009.
Household and NPISH net lending is calculated to NOK -7 billion in the four quarter period to the first quarter of 2010. This is nearly in line with the four quarter development in net lending of the last three quarters of 2009. Households’ net lending was NOK -8 billion in 2009 and NOK -34 billion in 2008.
Households’ borrowing is reduced
Households’ borrowing from banks and other financial corporations has developed moderately since the end of 2008. In the last four quarter period, households’ borrowing amounted to NOK 116 billion compared to NOK 120 billion in 2009. Simultaneously, households’ net acquisition of quoted shares declined, while net disposal of short and long-term bonds increased.
Net holding gains were NOK 69 billion in the last four quarter period. This amounts to more than 40 per cent of net holding losses due to the financial turmoil and crisis. Households’ net financial assets increased by NOK 61 billion during the last four quarters and are calculated to NOK 316 billion at the end of the first quarter of 2010.
Central government’s net lending continues to decrease
Central government’s net lending in the last four quarter period is calculated to NOK 251 billion, which is the lowest four quarter level since the second quarter of 2005. This is due to a weakening of the petroleum revenues and the inflows of government petroleum revenue to the Government Pension Fund Global in the first quarter, which was the lowest since the fourth quarter of 2003. In spite of declining financial investments, central government’s net financial assets increased by NOK 846 billion in the four quarter period to the first quarter of 2010. Net holding gains in the four quarter period were NOK 596 billion, and this amounts to about 64 per cent of net holding losses due to the financial turmoil and crisis. At the end of the first quarter of 2010, central government’s net financial assets were NOK 3 956 billion.
Local government borrows more
The local government’s net lending in the last four quarter period is calculated to NOK -30 billion, compared to NOK -23 billion in 2009. Local government’s borrowing increased by NOK 5 billion in the period to the first quarter of 2010. Net holding gains amounted to NOK 6 billion, but the negative net lending led to a weakening in the local government’s net financial position of NOK 24 billion. At the end of the first quarter of 2010, the local government had a net debt of NOK 158 billion.
Norway’s net financial assets abroad increase
Norway’s net foreign assets were calculated to NOK 2 234 billion at the end of the first quarter of 2010. This is up by almost NOK 105 billion from the end of the fourth quarter of 2009. In the last quarter, Norway’s net lending abroad was NOK 97 billion, while net holding gains due to exchange rate developments in foreign exchange and global security markets were NOK 8 billion.
|4. quarter 2007||1. quarter 2008||2. quarter 2008||3. quarter 2008||4. quarter 2008||1. quarter 2009||2. quarter 2009||3. quarter 2009||3. quarter 2009||1. quarter 2010|
|Financial assets||5 520||5 387||5 539||5 877||6 578||6 033||6 242||6 255||6 307||6 561|
|Liabillities||4 297||4 149||4 279||4 379||4 924||4 563||4 419||4 229||4 177||4 327|
|Net financial assets / net financial wealth||1 224||1 238||1 260||1 498||1 654||1 470||1 823||2 026||2 130||2 234|
|Change in net financial assets / net financial wealth||-30||14||23||237||156||-184||353||203||104||105|
Net lending as defined in non - financial accounts ( capital account ) =
savings + net capital transfers - net acquisition of non - financial assets
Net lending as defined in financial accounts =
net acquisition of financial assets - net incurrence of liabilities
Savings is non-consumed income and can be invested in financial or non-financial assets. If savings exceed non-financial investments, a sector has a surplus of funds and becomes a net lender to other sectors. In the financial transaction account, this means that the sector acquires more financial assets than liabilities. On the other hand, if savings are less than non-financial investments, investments have to be funded either by selling financial assets or incurring debts. Household investments in non-financial assets mainly reflect the purchase of new housing and fixed investments by unincorporated enterprises. They typically finance substantial parts of these investments by incurring debt in the form of loans.
Net financial assets ( net financial wealth ) = total financial assets - total liabilities
The financial balance sheet shows the financial position of a sector at the end of the reference period and is broken down into the categories of financial assets and liabilities. Insurance technical reserves, currency and deposits are the predominant assets held by households, while loans provided by financial corporations (banks etc.) constitute the main proportion of liabilities.
Changes in net financial assets = net lending + other changes in assets , net
The change in the financial balance sheet during the reference period is a result of accumulated financial transactions and other changes in assets. The latter category mainly reflects revaluations due to changes in market prices of financial instruments.